CPI inflation up 15.68 percent in December

The CPI inflation soared by 15.68 percent in December 2010 over the same period of last year with phenomenal increase in perishable food items, showing a strong trend of increase in prices of food items which may push more people below the poverty line.
Official figures of monthly Consumer Price Index (CPI) inflation released by Federal Bureau of Statistics (FBS) on Tuesday showed increase in inflation in all the major price measuring gauges. The year-on-year CPI inflation recorded at 15.68 percent in December 2010 was over 15 percent for fourth consecutive months after September 2010 and highest for the last twelve months.
Analysts say the primary reason for high inflation in the country was fiscal indiscipline and structural issues, such as hoarding, black marketing, and cartelisation in the economy. The role of institutions, they said, such as Competition Commission of Pakistan (CCP) and provincial governments become more critical to deal with the structural problems.
The Ministry of Finance has recently attributed magnetisation of fiscal deficit as major reason for high inflation in the country from last three years along with short run factors such as disruption to supply chains of essential commodities and upward adjustments in energy prices.
According to the Finance Ministry this has also been one of the most sustained periods of inflationary pressure which started from January 2008 and is continuing, as 34 out of 35 months have recorded double-digit CPI inflation year-on-year basis.
Analysis of the FBS data showed that inflation rate measured through Wholesale Price Index (WPI) shot up to 24.40 percent and weekly inflation measured by the Sensitive Price Indicator (SPI) soared to 21.65 percent. Food inflation rose by 20.36 percent in December 2010 and 43.52 per cent increase in perishable food items shows a strong trend of increase in food prices.
According to the FBS data, the food inflation rose by 20.36 percent in December 2010 with cost of perishable food items going up by 43.52 per cent and non-perishable by 17.12 per cent. Analysis of the data showed an increase of 11.91 per cent in the cost of apparel, textile and footwear, 6.67 per cent in house rent, 22.72 per cent in fuel and lighting and 10.03 per cent in household furniture and equipment.
The cost of transportation and communication has gone up by19.19 per cent in December 2010 over previous month, recreation and entertainment by 13.82 per cent, education by 5.18 per cent, cleaning, laundry and personal appearance by 11.39 per cent and price of medicare rose by 17.84 per cent. Official figures revealed a 29.72 per cent increase in the price of electricity in December 2010 while the cost of fresh milk went up by 17.65 per cent, meat 30.41 per cent, onions 124.95 per cent, vegetable ghee 28.66 per cent, tomatoes 150.83 per cent, sugar 35.85 per cent, and price of vegetable soared by 30.50 per cent.